Business Times

Govt. failed to meet targets set up by IMF, EU: poll

Both the IMF and the European Union (EU) set certain targets relating to budget deficits and enforcement of UN conventions and if these were not met, there is justification in these facilities being suspended, comments received in a Business Times email poll reveal.

The poll said that the IMF was delaying the third instalment in its $2.6 billion loan owing to the government’s failure to maintain the targetted budget deficit last year, while the GSP + has been suspended owing to failure to comply with international conventions on human and labour rights.

Respondents were asked whether there was any justification in this and most replied with a YES answer. See details in the graphic.However, among those who disagreed with the justification, a retired government official said IMF and the EU were simply playing politics and “delaying (a decision) till elections end”.

He said the two groups need to “really understand what is happening out here”. He said the view in Colombo (among the elitist) is warped of what happens in the rest of the country. “They have the same thought processes, same issues and same one-sided discussions,” he added.

Here is a synopsis of the comments on the IMF issue:

  • This was not unexpected. To cut the budget deficit the government would have had to raise taxes and/or reduce subsidies and/or state expenditure all of which are impossible to do before the elections.
  • The government agreed to certain conditions. It was in fact the government who put forward the budget deficit targets, and if these targets cannot be met then there is every reason to suspend the disbursement. The government has resorted to loans from the private banks at commercial rates which will increase the fiscal debt, result in severe budget cutbacks especially in education and health. Taxes will increase and the people will have to face sever hardships with increased cost of living.
  • There is no purpose in doling out funds without a proper fiscal policy. It is similar to mismanaging a company showing no signs of improvement but requesting funds from its shareholders to keep the directors happy. Will this be tolerated by any shareholder?

Comments on the GSP+ issue:

  • GSP + was an incentive for achieving certain national governance standards. If we have failed to maintain the required standards then the question of its continuance should not arise.
  • This is very unfair. However the EU is not our bread and butter anymore and there are many other avenues available if we really explore.
  • It’s a wrong move. The EU doesn’t care about the possible loss of employment – only about human and labour rights. What about the rights of those who lose jobs?
  • Shameful blackmail. Arrogant white chauvinist hangover from a shameful colonial era. This is unashamed interference in the internal affairs of a sovereign state.
  • Decisions are to pressurise the government
  • Instead of fighting with the EU, the government should resort to engagement with the EU and other international agencies and see that there is effective legislation to safeguard the human rights of all communities in a multi ethnic society like Sri Lanka

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